Irish economy grew by 6% in 2019, despite challenges of Brexit

Ireland's economy performed well this year despite the challenges of Brexit.

That’s the sunny outlook coming from the ESRI’s Quarterly Economic Report for Winter 2019 coming out this morning.

The economists predict we will have hit 6 per cent growth by the end of the year, and the good news is that this will continue next year too, but at a lower rate, around half.

The experts at the ESRI said that it was admirable that we performed so well, considering the strong headwind of Brexit uncertainty we faced into.

But Brexit hasn’t gone away and this will still inhibit maximum growth next year.

The boffins at the ESRI have urged some caution over corporate tax receipts, saying that we can’t rely on these as they may be pure ‘windfall’ bonuses. 

The ESRI report says: “The Irish economy looks set to register strong growth again in 2019 with GDP likely to increase by almost 6 per cent in the current year.

Some growing stacks of coins with the word GDP (gross domestic product) on it (Getty)

“While certain multinational related transactions are distorting the headline figures, the large increase in taxation receipts and the continued strong performance of the Irish labour market means the underlying economy is performing well.

“The persistent growth of the Irish economy is remarkable given the strong headwinds observed in 2019, the uncertainty about the Brexit process, and the moderation observed in global conditions, all of which are likely to have had a negative impact on the domestic economy.

“The Brexit process has merely been parked, with the possibility of a free trade agreement being negotiated between the UK and the EU in 2020.

“This will almost certainly result in further uncertainty in the years ahead.

“We expect to see the economy grow by a slower rate in 2020 of 3.3 per cent.

And it adds: “Another potential challenge for the Irish economy is the issue of corporation tax receipts, which are becoming an increasingly large share of the total tax receipts of the Irish exchequer.

“They now account for over 18 per cent of total tax receipts and there is concern that a portion of these receipts may be windfall revenues, which are not sustainable.”